Huawei Forecasts 33% Rise in 2012 Full-Year Profits
Published on: 21st Jan 2013
Note -- this news article is more than a year old.
By: Ian Mansfield
Huawei has published preliminary financial figures and said that revenues for 2012 rose by 8 percent to RMB220.2 billion (USD35 billion) while net profit jumped by a third to RMB15.4 billion (USD2.45 billion). About 70% of Huawei's revenue was generated from serving telecommunications operators including 45 of the world's top 50.
The 2012 results audited by KPMG will be outlined in the company's annual report, which will be released in April.
Huawei's CFO Cathy Meng announced the results and said that the earnings disclosure is part of the company's ongoing commitment to be more open and transparent with stakeholders. The company has come under criticism over the opaque nature of its ownership, which has fueled the ongoing concerns about the company's alleged links with the Chinese military.
The company says that it is owned by its employees, but this appears to be a holding company limited to Chinese nationals with very limited shareholder rights as would be normally understood in such a situation.
Looking at the financial results, Meng said that the financial results were based "on strictly controlling G&A expenses and allocate more resources to bolster the front line and ensure continuous improvements on customer delivery and service quality," said Ms. Meng. "In addition, Huawei continued its ongoing management transformation, raising combined operating efficiency with an integrated financial services program."
The company invested 29.9 billion (USD4.76 billion) on R&D in 2012, accounting for more than 13% of the year's revenue.
Huawei's Carrier Network business group generated sales revenues of RMB160.3 billion. Huawei's Consumer business group recorded robust sales revenue of CNY 48.4 billion, with sales continuing to grow in developed markets including Europe and Japan. Huawei's Enterprise business group further developed its portfolio and won contracts, generating sales revenue of RMB11.5 billion.
Two-thirds of Huawei's overall revenue came from outside China. Among the overseas revenue, the Asia-Pacific region saw revenue of RMB37.4 billion, while Europe, Middle East and Africa recorded RMB77.4 billion and the Americas contributed RMB31.8 billion. The domestic market China recorded RMB73.6 billion.
Ms. Meng concluded with a projection that Huawei expects its overall revenue to grow 10-12% in 2013.